What's in This Issue - Spring 2017
Welcome to our inaugural newsletter for tax professionals and business leaders. EisnerAmper’s Business Tax Quarterly offers news and views on various topics throughout the year. And, in a year that promises to bring tax reform to the forefront of business, watch for our Tax Alerts that cover “breaking news.”
What’s in This Issue?
Federal income tax reform has been widely discussed since long before Republicans gained control of the White House and both houses of Congress in January 2017. A variety of potential approaches have been floated, but every proposal has contemplated lowering tax rates. On April 26, 2017, the Trump Administration released a reform outline that would, among other provisions, lower the corporate income tax rate from 35% to 15%, making U.S. rates more comparable to Canada (which has a 15% federal and 11-16% provincial rate) or the United Kingdom (19%).
Regardless of which form that tax reform eventually takes, virtually all experts agree some sort of reform will be enacted in 2017 or 2018, so all businesses should be prepared to respond to new tax legislation. Michael Hadjiloucas, partner-in-charge of the Corporate Tax Group at EisnerAmper LLP, offers several helpful tips and suggestions for businesses as they monitor the progress of tax reform.
Along with the obvious tax planning tactic of maximizing overall company deductions in 2017 and deferring income into 2018 (changing accounting method if needed), EisnerAmper recommends that businesses prepare models that map out the consequences of any possible changes, keeping a close eye on how they affect a company’s current and future tax position.
The Trump tax reform plan is likely to have a significant impact on multinational companies as well. For example, lower corporate income tax rates would reduce incentives for such companies to shift profits overseas, and an element of the plan that would impose a one-time tax on funds repatriated to the U.S. is designed to encourage multinationals to return those dollars for investment in the U.S. economy.
Finally, we advise you to consult with your tax professionals for assistance in analyzing the potential impact of tax reform.
Business Tax Quarterly – Spring 2017